SFCN has been touted by Utahns for Telecommunications Choice and other supporters of public networks as proof the municipal model can work. While Provo has been shelling out $2 million a year to keep iProvo afloat and the UTOPIA alliance has run into money worries, SFCN recently posted a $275,000 profit.

But is Spanish Fork's success legitimate or is it, as a high-profile critic suggests, as fleeting as the green-screen backgrounds on the network's television shows?

A review of city budgets shows SFCN has received more than $5 million in city funds since 2004, spread among five utility departments.

"I don't think we're being forthright with the residents," said Mayor Joe Thomas, a critic of his city's fiber-optic network. "They are subsidizing a cable system that half the people don't use."

But John Bowcut, the city's director of information services, maintains those payments are not subsidies but rather contributions toward retiring the system's debt.

"The utilities want to pay into it because they want to have ownership," Bowcut said.

SFCN was launched in 2001. But it wasn't originally planned as a television or Internet network. Bowcut said Spanish Fork initially sought to link government buildings with the system. The plan was simple: Use the system to read electricity meters on residents' homes from a remote location.

Eventually, the network grew into a conduit for TV and high-speed Internet service to residents.

Back then, Bowcut explained, Comcast offered no Internet service in the city, and Qwest's DSL offerings were poor.

Unlike Provo (which leases its network to providers), Spanish Fork actually runs its Internet and TV service. Its system was in place before the Legislature barred cities from providing such services.

That distinction, Bowcut argues, marks a significant difference between his system and others because the city doesn't have to share profits with others and has greater control over customer service.

This year, Bowcut said, SFCN actually turned a profit, returning $275,000 to the city and serving half the city's households. But records show the system is not operating subsidy-free.

The water, sewer, electric and irrigation departments each were assessed $94,500 a year from 2004 to 2007 to pay for the network. The broadband utility was charged $673,750 toward the assessment as well, bringing the total to $1.05 million a year.

In the current budget, assessments against the water, electric and irrigation departments fell to $68,142 apiece and sewer's share plunged to $9,567, dropping the total subsidy to $887,743.

"Spanish Fork is not profiting from this. We're just better at hiding the expense," Thomas said. "It's losing money every way you look at it. I'm not happy about it."

The mayor said the city needs to sell the system if it cannot make a profit without a subsidy.

Bowcut counters that the assessments aren't vital to SFCN's survival, but are a way for the other utilities to gain ownership in the system.

Kelly Peterson, Spanish Fork's electrical superintendent, said his department uses the fiber-optic network to control breakers in substations and relay information from radio-based meters to city offices. The payments, Peterson said, will allow the utility to own the lines connecting its systems.

Thomas questions that. He notes the system was created to read meters, and now the city has abandoned that in favor of radio meters.

Peterson said the technology for reading meters through the network was ineffective. The radio system, he added, was a better solution.

Royce Van Tassell, vice president of the Utah Taxpayers Association, sees SFCN as another example of why cities should avoid business ventures.

For example, UTOPIA, the fiber-optic network sponsored by 11 Utah cities, faces new questions about its fiscal fitness. A lack of customers may stick the cities with hefty bills. Meanwhile, iProvo's finances are under investigation by the state auditor.

Spanish Fork, Van Tassell said, is finding that it - like Provo - has to subsidize its network with public money.

"It's better left to the private sector," Van Tassel said.

dmeyers@sltrib.com